Anyone with a best choice to roll a 403b to IRA?

Discussion in 'Retail Brokers' started by r-in, Apr 1, 2011.

  1. r-in


    Going to have a 403b that needs to be rolled to a new plan, IRA. Anyone have a preference among the brokers that they would care to share, and reasons why?
    So far I'm leaning towards IB for the product availability and the trading costs. I do worry a bit about Customer Service if I have a problem, as in the past my experiences haven't always been the best. At the same time the IB people that come on here have been great with getting information and explaining questions or problems. Costs for their IRA are $30/year if I read correctly, plus most likely I will eat data fees most months as I don't intend to daytrade the account.
    Thanks for any ideas
  2. Cotton


    To have an IRA with IB, do you need an outside administrator or does IB serve as the administrator?
  3. r-in


    I obviously have some work ahead. What do you mean by outside administrator, or IB as administrator? I assumed that IB held the account, but that they use a 3rd party as administrator. My assumption is based on the note I read on fees which are $7.50 per quarter to another firm outside of IB. I know from past experiences when I walked away from my job that in order to include futures possible trading you needed a 3rd party and I assumed(probably out of ignorance) that is why IB has a 3rd party handling the IRA functions.
    Thanks for your time if you can respond.
  4. Cotton


    I meant custodian, not administrator. Reading their FAQ's on IRAs, the Delaware Charter Guarantee & Trust Company serves as custodian for IB IRA accounts. Sorry if there was a confusion.
  5. I have an IRA account with IB that was rolled over from a pension plan.

    IB arranges all of the details re administrator/ trustee etc. You do not need to worry about that at all.

    You cannot sell stocks short in an IRA. You also cannot sell naked calls. Option spreads, long and short, are allowed. Other than that, you can do most things.

    You can trade commodity futures without restriction.

    Make it an "IRA Margin Account" and IB will allow you to have the proceeds of stock sales without waiting for the 3 day settlement hold. Most brokers make you wait 3 days in an IRA account.

    This is not the same thing as a regular margin account - you cannot use leverage on stocks in an IRA.
  6. r-in


    Thanks for the further input, and I will go with the margin designation, if I go the IB route. I've got a month to work this out, so I will be reading all I can to make sure everything goes right.
  7. To do it at IB, one can:

    (1) Go ahead and open the initially-empty account online at IB. You may wish to make it an IRA Rollover account as opposed to an IRA account. although you do not have to. (An IRA Rollover account may be easier to transfer back into a pension plan).

    (2) Indicate online that a deposit will be made in the form of a "Direct Rollover". (Watch out there are several alternatives with similar-sounding names such as trustee-to-trustee transfer that are the *wrong* choice. Also just calling it a deposit is the wrong choice).

    (3) IB will snail-mail your instructions to your pension plan, certifying that it will accept the funds.

    (4) Your pension plan will wire or mail the funds in trust to IB. Preferably, do not accept or handle the check yourself. If they mail a check as opposed to send a wire, there will be holds.

    The whole thing will take a couple of weeks or more.

    If you or your plan makes errors, there may be tax consequences.

    That is what worked for me but you should obtain professional advice on what to do and how to do it and I cannot accept any liability if the above is wrong.
  8. r-in


    Thanks comintel, was thinking of trying to get the account open 1-2 weeks ahead, so a transfer would go smoothly. I have no intention of touching the money. The HR department said there shouldn't be any problems.
  9. r-in


    Anyone with thought on Optionshouse, or Scottrade for the rollover IRA account? I don't see any data fees mentioned with their platforms, and curious if customer service might be a bit better if needed.
    With IB in an IRA I'd still need to need to generate $30 in commissions per month to avoid the $10 data fee for the basic package. Most likely only an issue once in awhile, but another fee on top of the $30 annual fee.
    Optionshouse, and Scottrade don't seem to have a yearly fee or data fee.
    Scottrade is comparable for stock trades to IB, but not too much on options, and Optionshouse is better on stocks, and roughly equal on options. Not worried about futures trading with this account.
    Any input appreciated.
  10. You need to check if the other brokers you mention require 3-day settlement holds on all stock transactions in all IRA accounts.

    Most if not all brokers other than IB do so.

    If they do place such holds, and I suspect they do, then that would completely rule them out for me, leaving IB as the only practical choice.
    #10     Apr 20, 2011